Rio Tinto shares soar after $2.1bn share buyback completed

Reporter at City A.M. covering markets and exchanges, pharmaceuticals, science, chemicals and agriculture.

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Rio Tinto has sold land in British Columbia for $576m (Source: Getty)

Callum Keown

Rio Tinto shares have soared this morning after the miner completed a $2.1bn (£1.62bn) buyback and finalised the $576m sale of land in British Columbia.

The miner said it completed its off-market buyback of 41.2m shares in its Australian division Rio Tinto Ltd at a discount of 14 per cent to the market price – part of a $3.2bn buyback programme.

The share price of its London division Rio Tinto Plc rose 3.6 per cent on Monday after announcing the news in Australia.

Chief executive Jean-Sebastien Jacques said $2.1bn had been returned to shareholders through the buyback, while $1.1bn would be also be returned through its ongoing buyback of Rio Tinto Plc shares.

The company said the London division's on-market buyback – totalling $1.19bn – would begin in February next year and be completed by 28 February 2020, as part of a plan to return the proceeds of the sale of coal assets in 2018 to shareholders.

The iron ore miner also announced the completion of the lease and sale of a wharf in Kitimat, British Columbia to LNG Canada for $576m.

LNG Canada a joint venture made up of Shell, Petronas, PetroChina, Mitsubishi Corporation and Korea Gas Corporation, entered into an agreement with Rio Tinto in 2014 for options to lease or purchase areas of the land.